Nigeria community rejects Shell compensation offer

LAGOS, Nigeria (AP) — Nigeria's Bodo community in the oil-rich Niger Delta has rejected a compensation offer from Shell for two oil spills in 2008 that devastated the mangrove and fishing area, lawyers and the company said Friday.

"It is a great shame that the negotiations have not led to a settlement. I had hoped that this week would at last see the end of the litigation and enable us to start the process of rebuilding the community," said Chief Kogbara, chairman of the Bodo Council.

Shell has acknowledged liability for the spills five years ago, but it disputes the amount spilled and the impact on the community.

The Bodo community's law firm, Leigh Day, said that 13,000 fishermen lost their livelihoods because of the spills, and 31,000 inhabitants of 35 villages were affected in and around the Bodo lagoon and its associated waterways. Independent experts estimate between 500,000 and 600,000 barrels were spilled, devastating the environment and contaminating more than 75 square kilometers of mangroves, swamps and channels, says the law firm.

But a spokesman for the Shell Petroleum and Development Company of Nigeria Ltd., Jonathan French, said the number of fisherman impacted is likely lower, given the size of the area. The company also said a joint investigation team estimated that only 4,100 barrels were spilled. Shell blames most of the spills in the region on militant attacks or thieves tapping into pipelines to steal crude oil.

"We took part in this week's settlement negotiations with two objectives — to make a generous offer of compensation to those who have suffered hardship as a result of the two highly regrettable operational spills in 2008, and to make progress in relation to clean up," he said.

The Bodo members unanimously rejected the offer from the oil giant after talks that started Monday in Port Harcourt, the London-based Leigh Day law firm said in a statement.

Shell offered about $50 million to the community, according to a person close to the talks, who spoke on condition of anonymity because he wasn't permitted to speak to the media.

"Our clients know how much their claims are worth and will not be bought off cheaply," said Martyn Day, senior partner at Leigh Day.

Though an agreement wasn't reached, both Shell and Leigh Day said that talks between the community and company to start a cleanup are progressing and will continue in late September. Shell said it has not been able to access the area to start the cleanup process.

The spills caused the largest ever loss and damage to mangroves by oil, said the law firm.

Local communities remain largely hostile to Shell and other oil firms because of environmental damage. Some environmentalists say as much as 550 million gallons of oil have been poured into the delta during Shell's roughly 50 years of production in Nigeria, one of the top crude oil suppliers to the United States.

The United Nations has recommended that the oil industry and Nigeria's government set up a fund, with an initial injection of $1 billion, to begin what could be a 30-year cleanup and restoration project in the oil-stained region.